On Friday the investor said he is lowering his stake in a securities filing.
"Yesterday IEP tendered its Herbalife shares into the Company's self-tender offer. Of the shares we tendered, at most only 11.4 million could possibly be purchased in the tender, which would still leave us as the Company's largest shareholder with at least 34.3 million shares," Icahn wrote. "For almost six years, we have been one of Herbalife's strongest, most loyal supporters; we stood by the Company through a half-decade long short-selling campaign; and we never sold a share, even after our investment doubled. But, given that our Herbalife investment has become an outsized position, representing approximately 24% exposure to total NAV, it is only prudent for IEP to reduce its exposure."
Shares of Herbalife closed down 9.6 percent Friday.
On Friday Herbalife announced the results of its tender offer. The company said it was "oversubscribed" with 49.7 million shares tendered. It expects to accept 11.4 million shares at a cash purchase price of $52.50 per share or roughly $600 million. Herbalife will fund the stock repurchase from its term loans, credit facilities or cash on hand.
Icahn is selling 10.5 million Herbalife shares valued at approximately $550 million in the company's tender offer, according to a source familiar with the matter. Without Icahn's participation the offering would have been under-subscribed.
Dow Jones was first to report the size of Icahn's tender offer sale.
"There's an old Icahn rule, when you make over $1.5 billion on a situation, you sell a bit," Icahn told The Wall Street Journal.
As the largest Herbalife shareholder, Icahn repeatedly battled Pershing Square's Bill Ackman over his bearish stance on the nutritional supplement maker.
In March Icahn took a victory lap on his profitable Herbalife investment, telling CNBC he had "a billion" dollar profit in the stock.
The investor seemed to reference Ackman's exit from his losing bearish bet as a reason why he's reducing his stake.
"We believe Herbalife's business is stable, the short-sellers have largely exited, and the Company is well-positioned for the future," Icahn said in the Friday filing.
Herbalife did not immediately respond to a request for comment.